DOW JONES NEWSWIRES
The U.S. Securities and Exchange Commission is investigating Broadcom Corp.'s (BRCM) accounting of litigation reserves as far back as June 2010, the company disclosed Friday.
Shares fell 2.7% at $35.75 after hours Friday after the chip maker said the SEC's Los Angeles office said it will conduct a formal investigation into the matter.
In a public filing with the SEC Friday, Broadcom said it believes a former employee's allegations in April about litigation reserves in the first quarter of 2011 triggered the investigation. The company held reserves at the time to address intellectual-property claims.
Broadcom said it completed an internal review of the allegations with outside counsel and didn't find any improprieties. The internal review also determined the company shouldn't restate its financial statements for 2010 and the first quarter of 2011.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com